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Crude Prices Fall After Bid
To Break $69 a Barrel

Crude-oil futures ended an exceedingly volatile session with deep losses as an early attempt to rally above $69 was met with a wall of selling.

There was no apparent news behind the sharp reversal in prices, and analysts said technical factors and easing concerns about supply led investors to liquidate recently established long positions.

Natural-gas futures, whose early rally had lent support to crude oil, also tumbled after selling by deep-pocketed commodity funds spurred others to exit their positions.

March crude on the New York Mercantile Exchange settled $1.36, or 2%, lower at $66.56 a barrel after rallying as high as $69 a barrel. March natural-gas futures ended 59.3 cents, or 6%, lower at $8.723 per million British thermal units.

The front-month March crude contract's failure to top $69 triggered pre-placed sell orders, while government data showing a bigger than expected build in inventories eased supply concerns heightened by the rising crisis over Iran's nuclear program, analysts said.

"It's very possible that all we have seen here is a really nasty technical reversal," said Bill O'Grady, an analyst with brokerage house A.G. Edwards. "It is also possible that the market feels comfortable with the level of inventories we got and feels the odds of a major disruption from the conflict with Iran are small."

The rally came amid heightened tensions between the West and Iran over Iran's nuclear-research program.

European nations called on the International Atomic Energy Agency to refer Iran to the United Nations Security Council over its nuclear program. With Russia and China throwing their support behind reporting Iran on Monday after months of opposition to referral, the motion was expected to pass by a wide margin.

Iran said the move would mean the end of diplomacy and warned that it would resume large-scale uranium enrichment. Iranian defense Minister Mostafa Mohammad Najjar said Iran would deliver a "crushing response" to any nation that attacked its nuclear facilities.

Mr. O'Grady said fears that Iran might halt its oil exports over the nuclear row are unfounded and that "the market feels the Iran situation has been fully priced in."

In other commodity markets:

COPPER: Prices on the Comex division of the Nymex rose to contract highs with the help of a drawdown in London Metal Exchange warehouse inventories and a strong report on construction spending in the U.S. Spot February rose 2.35 cents a pound to $2.259. Most-active March copper increased 2.05 cents to $2.249.

SUGAR: Futures at the New York Board of Trade rose on buying from trade houses and locals on the trading floor that saw an opportunity to buy early weakness as the contract hovers near 24-year highs. The March contract rose 0.27 cents to 18.29 cents a pound.